Assistant U. S. Attorney Robert Ciaffa (619) 546-7748    

NEWS RELEASE SUMMARY – April 8, 2019

SAN DIEGO – Jacob Burrell Campos of Rosarito, Mexico, was sentenced today by U.S. District Judge Marilyn L. Huff to serve two years in prison and forfeit $823,357 in illicit profits for operating an unlicensed money transmitting business in connection with his sale of hundreds of thousands of dollars in Bitcoin to over 1,000 customers throughout the United States.

Burrell, a U.S. citizen, has been in custody without bail since his arrest on August 13, 2018.  He pleaded guilty on October 29, 2018, admitting that he operated a Bitcoin exchange without registering with the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of Treasury, and without implementing the required anti-money laundering safeguards.

According to the plea agreement, Burrell advertised his business on Localbitcoins.com, and communicated with his customers through email and text messages, often using encrypted applications.  He negotiated a commission of 5 percent above the prevailing exchange rate, and accepted cash in person, through nationwide ATMs, and through MoneyGram.  Burrell admitted that he had no anti-money laundering or “know your customer” program, and performed no due diligence on the source of his customers’ money. 

Burrell admitted that, at first, he purchased his supply of Bitcoin through a U.S.-based, regulated exchange, but his account was soon closed because of the large number of suspicious transactions.  He then resorted to a cryptocurrency exchange in Hong Kong, where he purchased a total of $3.29 million in Bitcoin, in hundreds of separate transactions, between March 2015 and April 2017. 

Finally, Burrell admitted that he exchanged his U.S. cash, which he kept in Mexico, with Joseph Castillo, a San Diego-based precious metals dealer, and that between late 2016 and early 2018, he and others imported into the United States, on an almost daily basis, a total of over $1 million in U.S. currency, in amounts slightly below the $10,000 reporting requirement.

In a sentencing memorandum, prosecutors argued that unlicensed money transmitters pose a serious threat to the integrity of the U.S. financial system by creating a hole in the anti-money laundering regulatory scheme and allowing criminals to launder their cash proceeds without scrutiny.  In this case, Burrell provided his clients with anonymity and privacy, and exchanged over $1 million in unregulated cash.

U.S. Attorney Robert Brewer said, “The federal government will continue to investigate and prosecute all white collar criminals who refuse to comply with the anti-money laundering laws of the United States, and who assist others in avoiding scrutiny of their ill-gotten gains. I applaud the excellent work of prosecutor Robert Ciaffa and federal agents who investigated these crimes.” 

 “Today’s sentencing of Burrell is a reminder to those illegal and unlicensed money transmitters that the laws and rules apply to crypto currency dealings just as they do to other types of financial transactions,” said David Shaw, Special Agent in Charge for Homeland Security Investigations in San Diego.  “HSI Special Agents are proud to work with our law enforcement partners to ensure the integrity of the U.S. financial system, and we will continue to adapt to enforce laws across all borders, including cyberspace and the Darknet.”

DEFENDANT                                               Case Number 18CR3554-H

Jacob Burrell-Campos                                     Age: 22                       Rosarito, Baja California, Mexico

Count 1:  Conducting an unlicensed money transmitting business, 18 USC 1960.

Statutory maximum:  5 years prison, $250,000 fine.

AGENCIES

Homeland Security Investigations

Internal Revenue Service

Postal Inspection Service

 

NEWS RELEASE SUMMARY – October 29, 2018

SAN DIEGO – Jacob Burrell Campos pled guilty today in federal court to operating an unlicensed money transmitting business, in connection with his sale of hundreds of thousands of dollars in Bitcoin to over 1,000 customers throughout the United States from January 2015 to April of 2016.   

            According to the terms of his plea agreement, Burrell admitted to operating a Bitcoin exchange without registering with the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of Treasury, and without implementing the required anti-money laundering safeguards.  According to the plea agreement, Burrell advertised his business on Localbitcoins.com, and communicated with his customers through email and text messages, often using encrypted applications.  He negotiated a commission of 5% above the prevailing exchange rate, and accepted cash in person, through nationwide ATMs, and through MoneyGram.  Burrell admitted that he had no anti-money laundering or “know your customer” program, and performed no due diligence on the source of his customers’ money. 

Burrell admitted that, at first, he purchased his supply of Bitcoin through a U.S.-based, regulated exchange, but his account was soon closed because of the large number of suspicious transactions.  He then resorted to a cryptocurrency exchange in Hong Kong, where he purchased a total of $3.29 million in Bitcoin, in hundreds of separate transactions, between March 2015 and April 2017. 

Finally, Burrell admitted that he exchanged his U.S. currency, which he kept in Mexico, with Joseph Castillo, a San Diego-based precious metals dealer.  Between late 2016 and early 2018, Burrell and others imported over $1 million in U.S. currency on almost a daily basis.  Burrell admitted that they did this in amounts slightly below the $10,000 reporting requirement.  Castillo pled guilty to making a false statement on his federal tax returns, and is awaiting sentencing on December 13, 2018.

According to his plea agreement, Burrell agreed to forfeit to the United States a total of $823,357.00.

            “Unlicensed money transmitting businesses, especially those operating at or near the border, pose a serious threat to the integrity of the US banking system, and provide an ‘open door’ for criminals to utilize such businesses to launder the proceeds of their illicit activities,” said U.S. Attorney Adam Braverman.  “The Department of Justice will continue to investigate and prosecute all individuals and businesses that seek to evade the licensing and anti-money laundering requirements under federal law.”   

            Burrell will be sentenced on February 11, 2019, and faces a maximum of five years’imprisonment.

DEFENDANT                                                Case Number 18CR3554-H

Jacob Burrell-Campos                                    Age: 21                       Rosarito, Baja California, Mexico

Count 1:  Conducting an unlicensed money transmitting business, 18 USC 1960.

Statutory maximum:  5 years prison, $250,000 fine.

AGENCIES

Homeland Security Investigations, Internal Revenue Service, Postal Inspection Service